How is physical occupancy defined?

Physical occupancy is defined as the ratio of occupied units to the total number of units in a property. This measurement reveals how many of the available rental units are currently occupied by tenants. It is calculated by taking the total number of occupied units and dividing it by the total number of units in the property, then often multiplying the result by 100 to express it as a percentage.

This definition is fundamental because it offers a clear picture of how effectively a property is being utilized, reflecting the current demand and success of leasing efforts. Physical occupancy is crucial for property owners and managers, as it directly impacts revenue generation and informs decisions regarding marketing, pricing strategies, and property maintenance.

Understanding physical occupancy helps the leasing team to gauge market conditions, optimize leasing practices, and ultimately drive operational performance for the property.